Was thinking about this over the weekend, how much will Spieth's success help elevate Under Armor's golf penetration? How long until they are in the club/ball market, if ever.

Probably start with golf balls

Are there any companies that Under Armour could buy and not have to start from square one in the equipment market? The last few years it seems there has been a lot of consolidation happening.

Does UA make any sports equipment besides apparel? I know they make uniform-related stuff that you could possibly classify as "equipment" but seems like it would be a pretty big leap.

They could maybe do some licensing agreement with an equipment maker - just put their logo on equipment. Not have to buy a manufacturer so to speak.

Left field thinking, but what if they bought the golf arm of an established company such as Wilson?

Wilson has years of experience in making quality clubs (I think their FG-17's still rank as the irons with the most wins on tour), but is not really popular in the modern marketplace. UA maybe could give it that modern appearance/acceptance?

How hard would UA have to convince him to switch from Titleist equipment?

I don't think Titleist pays well. I would imagine there is a dollar amount that would make him switch.

I thought about that after I posted, and I had to look it up. I guess it depends how loosely you define equipment.

I would kind of be surprised if they don't get into clubs after this. They have the inside track to lock down one of the top golfers in the world for his career if they play this right. Acquiring an existing line and slapping their logo on it might not be a bad way to go.

Under Armour will be releasing their golf spikes sometimes this Spring I believe. I'm sure they will sell like hot cakes (even more so after Jordan winning the Masters).....I don't see them getting into the club game. I do see them getting into the accessories game though. i.e. gloves, tees, towels, golf bags, etc.

The golf industry is declining. Seems like it would be a pretty terrible move to get into equipment. Their business model is based on apparel, and I think they'd be wise to stick with it. They can stick with their core and grow their share of the golf market through clothing, shoes, gloves, and other apparel related accessories, without risking investment to get themselves into different portions of declining industry.

Three reasons they won't get into the equipment market any time soon:

-Margin is comparatively terrible.
-Market is comparatively terrible.
-Capital outlay is immense. (They would need to buy out a smaller outfit like Cobra OR start from scratch -- but even Nike purchased and/or licensed all of Titliests patents for their blades. Then, after spending gobs of capital on the product, they would have to pay $100M+ annually to keep elite players using their stuff.)

Ain't gonna happen....

It makes a whole lot more sense to keep selling overpriced shirts, socks and underwear and paying their players much less. Players like Speith are happy because he gets to choose his equipment AND he gets paid.

Yeah, I guess that makes more sense than getting into clubs.

Heard Spieth got an extra mil from UA to keep his hat clean from other ads.

Nike will step in and throw the Tiger money at him. Game over.

Anyone have a clue how long UA had him locked up for?

I will say they have nice looking stuff.

I think he signed 10 years last year. But that's from memory from one article.

Interesting to hear what the buyout is. If I'm him I stay there and make my own brand, plus he gets to keep playing titleist.

"Left field thinking, but what if they bought the golf arm of an established company such as Wilson?"

What if UA bought Titleist?

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"Left field thinking, but what if they bought the golf arm of an established company such as Wilson?"

What if UA bought Titleist?

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I doubt under Armour could afford Acushnet

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"Left field thinking, but what if they bought the golf arm of an established company such as Wilson?"

What if UA bought Titleist?

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I doubt under Armour could afford Acushnet

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Under Armour is an $18B market cap company. The Fila guys are hoping to get $1.8B in the Acushnet IPO. I'm pretty sure UA could find a way to make that deal work if they thought it made sense. Acushnet has had lots of issues with profitability for shareholders over the years.

http://mobile.reuters.com/article/idUSL3N0UL0JT20150106?irpc=932

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Acushnet's earnings before interest, taxes, depreciation and amortisation rose from $120 million at Fila Korea's acquisition to an estimated $185 million in 2014,

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10x multiple to get that $1.85B valuation seems nuts to me for a manufacturer in a game that's shrinking (primarily stateside), but these guys have a lot more money than me.

THIS . . .

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Three reasons they won't get into the equipment market any time soon:

-Margin is comparatively terrible.
-Market is comparatively terrible.
-Capital outlay is immense. (They would need to buy out a smaller outfit like Cobra OR start from scratch -- but even Nike purchased and/or licensed all of Titliests patents for their blades. Then, after spending gobs of capital on the product, they would have to pay $100M+ annually to keep elite players using their stuff.)

Ain't gonna happen....

It makes a whole lot more sense to keep selling overpriced shirts, socks and underwear and paying their players much less. Players like Speith are happy because he gets to choose his equipment AND he gets paid.

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One thing nobody here has mentioned is the pace at which the game is growing in China. There are golf courses popping up everywhere over there and some of the nicer courses are booked 6 months out (no exaggeration). I'm sure the Chinese have some of their own domestic golf companies, but giants like Nike and UA undoubtedly see huge untapped potential in the golf industry.

Eventually we will see the "Yao Ming" of golf -- a Chinese National who makes a splash on the PGA Tour / global golf stage. When that happens, there will probably a lot of money to be made over there.

strictly my opinion...

in the world of M&A activity, I believe that UA will sell before they would acquire

NIKE / UA merger

Golf shirts would be $120 a pop with that kind of monopoly.

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The golf industry is declining. Seems like it would be a pretty terrible move to get into equipment. Their business model is based on apparel, and I think they'd be wise to stick with it. They can stick with their core and grow their share of the golf market through clothing, shoes, gloves, and other apparel related accessories, without risking investment to get themselves into different portions of declining industry.

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Just curious, how is the golf industry declining? I thought it was on the upswing(lol)

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The golf industry is declining.

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The number of rounds played per year has been declining consistently the last few years. That's why you see initiatives to play faster or make the game easier to appeal to more people.

The # of recreational rounds per year has declined every year for a full decade. There were 30MM golfers in 2005, it started declining the year after, and is now below 25MM. Men under 35 are dropping off the fastest. More women are joining the game, but 3X as many men are leaving it.

Blame it on urbanista hipster bags who find golf courses as a waste of land and water resources

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I'm sure the Chinese have some of their own domestic golf companies, but giants like Nike and UA undoubtedly see huge untapped potential in the golf industry.

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I'm sure they do, too. They are all busy producing counterfeit Nike, Titleist, Taylor Made, Calloway, etc...

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Blame it on urbanista hipster bags who find golf courses as a waste of land and water resources

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It isn't just that. I used to play a lot (~90s through mid-2000s). Played maybe 5 rounds since 2007 though I'm getting back into it a little. Even if I only play 9 holes, I'm still looking at about a 4 hour time commitment (including travel), 25 bucks on a cheap course, and (for me), sun exposure that I don't really need. Now, I will still only play half a dozen times a year max. For some corporate type guys like me who picked up the game so as not to embarrass ourselves when a tournament came up -- liked it, and kept playing it for a while, well, other things come up that are more important. Whether kids, work, or other hobbies -- different reasons for everyone.

Yes.

Sorry to derail this further, but from the perspective of someone who has only been playing 5 years and didnt discover the game until 28, it is more than just the time/conflicting responsibilities factor (although thats a significant part). Is plain and simple greed.

The golf industry hasnt done itself any favors on a concerted effort to draw adults into the game from a long term perspective. When a grown up hack like myself discovers the game they are thrown into a mass of confusion and marketing, constantly flashed more forgiving products and more distance without any understanding of what to do or even how to go about really learning golf and understanding the game. The guy who I discovered the game with is the same age as me and gave up after a year. I chose to stick with the craigslist route and saw the problem as myself, not the clubs. If you didnt grow up competing in golf, or even just playing regularly with friends and family, you have no initial sentimental or nostalgic reason to invest the money and time into the game.

I firmly believe that the better you play the more you enjoy the game, and the more you enjoy it the more you will be willing to spend the money and time to do it. If the industry wants to keep whoring itself out on the fantasy of "You can hit this club 325 yards!!" Then they will continue to get short term dollars and lose in the long run. But if muni courses, semi private courses, driving ranges or whatever had an incentive to point new found hacks to a standard developmental yet FUN program to progressively grow their ability at the pace they can afford, I think it will sow the seeds of sustainability for the game. Its highly unlikely it will happen, but I think thats a much better approach. But the industry shouldnt whine about losing golfers each year when they didnt take the right steps to keep them in the first place.

/rant